Market Close KLCI ends the week in the red after ECB disappointment

by **Cals** Sat 05 Dec 2015, 00:12

Market Close

[size=28]KLCI ends the week in the red after ECB disappointment

By Gho Chee Yuan / theedgemarkets.com | December 4, 2015 : 5:48 PM MYT

KUALA LUMPUR (Dec 4): The FBM KLCI closed in the red for the third consecutive day today, tracking regional markets, which were clouded by bearish sentiments after the European Central Bank (ECB) announced a smaller-than-expected monetary stimulus.

At the end of trading hours, the key index fell 6.05 points or 0.36% to finish the last trading day of the week at 1,667.87 points. It lost 14.72 points or 0.87%, week-on-week.

The decline was seen in selected blue-chip stocks, including Kuala Lumpur Kepong Bhd ([You must be registered and logged in to see this image.] Valuation: 0.50, Fundamental: 1.00), Sime Darby Bhd ( Valuation: 1.40, Fundamental: 0.80) and Hong Leong Bank Bhd ( Valuation: 1.45, Fundamental: 2.00), which are among the top losers and have also weigh down the KLCI.

RHB Research ([You must be registered and logged in to see this image.] Valuation: 1.65, Fundamental: 1.40)'s head of research Alexander Chia expects the KLCI to remain in a tight trading range next week as the market is going to price in the quantitative easing (QE) by the ECB as well as the anticipation of the US rate hike.

"The market is pricing in the disappointment of the ECB QE programme," said Chia, adding that the QE programme is below market's expectation.

He said the long-awaited US Federal Reserve rate hike will likely be announced on Dec 15.

"Given this, I expect the index to trade within a tight range next week," he added.

Market sentiment is largely negative with 424 decliners outpacing 347 advancers, while 379 counters remained unchanged, after 1.57 billion shares — worth RM1.597 billion — changed hands.

Kossan Rubber Industries Bhd ([You must be registered and logged in to see this image.] Valuation: 1.10, Fundamental: 2.10) led the gainers by advancing 36 sen or 4.44% to close at RM8.46. British American Tobacco (Malaysia) Bhd ( Valuation: 1.50, Fundamental: 1.35) was the top loser, falling 72 sen or 1.23% to close at RM57.88.

The most actively traded counter is Instacom Group Bhd ([You must be registered and logged in to see this image.] Valuation: 0.00, Fundamental: 1.25), registering a trading volume of 86.06 million. It closed two sen or 7.02% lower at 26.5 sen today.

Regional markets were also flagging red: the Japan Nikkei 225 closed down 2.2%, marking its biggest one-day loss since Sept 29, while the Shanghai Composite Index saw a 1.67% decline.

The South Korea Kospi index fell 0.99%, while the Hong Kong Hang Seng lost 0.81%.

Overnight in the US, the Dow Jones Industrial Average declined 1.42%, S&P 500 fell 1.44% while Nasdaq Composite was 1.67% lower.

Reuters reported that Asian shares joined a global markets slump on Friday after the ECB stimulus package fell short of markets' expectations, sending the euro rocketing to its biggest one-day surge in nearly seven years.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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